Selling Consumers’ Privacy: How You Can Protect Yourself from Identity Theft and Credit Fraud

by · December 23, 2011

Have you ever noticed that some companies seem to know more about you than your friends and relatives do? That’s because a lot of what you thought was your personal information is now in the public domain. It’s for sale, just like soap. And how much of it there is out there and where it’s could end up should be a wakeup call for consumers.

Your credit report is a treasure trove of information about you. It contains your name, your age and gender, your address and phone number, employment, your credit score, your current and past debt and your Social Security number. But after the 2008 mortgage meltdown, that’s apparently no longer enough information for lenders. This month, The New York Times reported that a company called CoreLogic has introduced a new kind of credit file on steroids that reveals even more information about consumers than the three major credit bureaus’ reports do.

What’s on the Public Record Is Fair Game for Your Credit File

Since what we do online is constantly being tracked and recorded, it should come as no surprise that much of the information in CoreLogic’s new report comes from court and public records. It includes property tax liens, child support judgments, delinquent homeowner’s association dues, evictions and missed payments that have gone into collection. According to the Times, CoreLogic is partnering with FICO – a provider of one of the most popular credit scores to lenders. Together, the companies will create a CreditScore report for an estimated 100 million consumers. That’s on top of the 200 million consumers who have credit reports from the three major credit reporting agencies – Experian, TransUnion and Equifax.

FTC Cracks Down On Credit Report Resellers

But where the information in our credit reports is ending up is getting increasing scrutiny from the government. What most consumers don’t realize is that every time their credit is checked, the information provided to chosen credit bureaus can be sold – not just to lenders but to companies that sell it and resell it for a profit. Case in point: CoreLogic gets information on payday loans through its Teletrack unit. But this June, Teletrack agreed to pay $1.8 million to settle Federal Trade Commission charges that it sold its credit reports to marketers, which is against the law. The FTC wrote that consumer applications for payday loans is credit report information that’s protected by the Fair Credit Reporting Act.

Our credit report information can be stolen in a variety of different ways, including from financial institutions that are supposed to be safeguarding it. Earlier this year, the FTC reached a settlement with three consumer credit report resellers whose deficient security practices allowed hackers to obtain over 1,800 consumer credit reports without authorization. According to the FTC, ACRAnet, SettlementOne Credit and Fajilan and Associates (doing business as Statewide Credit Services) failed to make reasonable efforts to protect against future data breaches even after they became aware of the hackers’ unlawful activities. The FTC ordered the companies to put comprehensive cybersecurity measures in place and submit to security audits over the next 20 years. The settlements also require them to provide credit reports only to customers for legitimate purposes. What a concept!

Remember, crooks don’t need our credit cards to commit identity theft and credit fraud. Here’s what you can do to protect privacy.

Make Privacy Protection Your #1 Priority

∙ Use different complex passwords for all your accounts and change them often.

∙ Don’t use your full birthdate on social networking sites or elsewhere online. Identity theft can begin with just one piece of your personal information.

∙ Watch out for emails that ask you for personal information.

∙ Stay alert for warning signs of credit fraud: Not receiving your monthly statements; receiving calls or letters from collection agencies for accounts you didn’t open; and being rejected for credit or being offered less favorable terms.

∙ Only provide personal information on sites that have “https” in the web address or a lock icon on the browser.

∙ Remember one preapproved credit card offer tossed in the trash can jump start identity theft. Opt out of receiving marketing offers at 888 567-8688 or at www.OptOutPrescreen.com.

∙ Use a virtual private network solution like PRIVATE WiFi™. VPNs encrypt the information traveling to and from your computer. That makes it invisible to cyber thieves.

∙ If you suspect you’re the victim of identity theft and credit fraud, put a free fraud alert on your credit reports with the three big credit reporting agencies – Equifax, Experian and Transunion. Or better yet, place a security freeze on your credit file which prevents new accounts from being opened and prevents your credit from being reported to third parties. Small fees may apply.

If your privacy has been invaded by credit report resellers, we’d like to hear your story. Drop us a line and let us know what happened to you.